Cinepolis, the fifth-largest multiplex operator in the world which has been on the prowl for years in India, has acquired Fun Cinemas from Essel Group, emerging as the fourth-largest multiplex operator in the country behind PVR, INOX and Big Cinemas.

The equity value of the deal is estimated at around Rs 480 crore ($77 million), according to Business Standard which first reported the transaction citing an internal company mail.

However, it is believed to have been struck at an enterprise value of around Rs 550 crore ($89 million). If Cinepolis has acquired the business at that enterprise value, it has paid around Rs 6.6 crore per screen. This appears to be on the higher side of the Rs 3-5 crore per screen paid by acquirers in the multiplex space in the recent past.

It is however, just a tad higher than what INOX paid for Satyam, most recently, an estimated EV per screen of Rs 6.3 per crore.

It costs around Rs 3-4 crore per screen to set up a new unit but strategic acquirers now would be paying a premium to gain scale in the market which is fast consolidating at the top.

E-mails sent to spokespersons for Cinepolis and Fun Cinemas did not elicit any response at the time of publishing this article.

Update (Jan 28, 2015)

The firm has made a formal announcemnt of the deal wthout sharing financial details.

"We have a clear vision of being the leader in cinema exhibition in India and operate 400 screens by 2017. This acquisition is a step in that direction. Fun Cinemas is an established brand in India and has been around for more than 10 years. This would help us hit the ground running with the acquired properties," said Javier Sotomayor, MD, Cinépolis India.

“There are two key drivers for the decision to acquire Fun Cinemas. First of all, this will strengthen the reach of the company in the two main cities of India, Delhi and Mumbai. Secondly, there are five markets where Fun Cinemas and Cinépolis are present together and the synergies brought in would maximise the profitability of joint operations," Sotomayor added.

Fun Cinemas has around 83 screens in India which will expand Cinepolis' presence from current 110 screens to 193 screens.

Fun Cinemas is the brand of Fun Multiplex Pvt Ltd, a privately held chain of multiplex theatres run by Subhash Chandra-led Essel Group. The firm also has a small operation under Talkie Town, which is pitched as a brand for single screen theatres and is currently operational in Hyderabad.

Of the multiplexes that Fun Cinemas' operates, majority are owned by the company while the rest are operated on franchise basis.

Earlier in 2013, INOX was in talks with Essel Group to buy out Fun Cinemas. It had recently acquired New Delhi-headquartered Satyam Cineplexes Limited (Satyam) for Rs 182 crore ($30 million).

In another deal, Carnival Group acquired HDIL's multiplex properties and is also rumoured to be in talks with Big Cinemas for a deal which can catapult it to the top end of the game.

PVR had virtually sealed the top slot a couple of years ago by acquiring Cinemax, thereby emerging as the largest multiplex operator in the country. PVR is also reportedly looking to strike a deal in south India to strengthen its presence by acquiring SPI Cinemas.